Stocks May See Further Upside In Early Trading - U.S. Commentary

(RTTNews) - Stocks may move to the upside in early trading on Thursday, extending the rally seen over the course of the two previous sessions. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 35 points.

The upward momentum for the markets comes as traders digest some upbeat U.S. economic data, including a Commerce Department showing a sharp jump in durable goods orders.

The Commerce Department said durable goods orders shot up by 3.4 percent in April after climbing by an upwardly revised 1.9 percent in March. Economists had expected orders to rise by just 0.3 percent.

However, the substantial increase was due in large part to a spike in orders for commercial aircraft and parts, which soared by 64.9 percent.

Excluding orders for transportation equipment, durable goods orders rose by a much more modest 0.4 percent in April after inching up by 0.1 percent in March. The increase matched economist estimates.

The report also showed a 0.8 percent decline in orders for non-defense capital goods excluding aircraft, a closely watched indicator of capital spending.

A separate report from the Labor Department showed a bigger than expected drop in initial jobless claims in the week ended May 21st.

The report said initial jobless claims fell to 268,000, a decrease of 10,000 from the previous week's unrevised level of 278,000. Economists had expected claims to edge down to 275,000.

While the two reports point to economic strength, the data may also add to recent concerns about the outlook for interest rates.

Shortly after the start of trading, the National Association of Realtors is scheduled to release a report on pending home sales in the month of April.

Pending home sales are expected to climb by 0.8 percent in April after jumping by 1.4 percent to their highest level in almost a year in March.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

On the heels of the rally seen on Tuesday, stocks saw some further upside during trading on Wednesday. With the continued strength on the day, the Nasdaq and the S&P 500 reached their best closing levels in about a month.

The major averages ended the day firmly in positive territory but off their highs for the session. The Dow jumped 145.46 points or 0.8 percent to 17,851.51, the Nasdaq advanced 33.84 points or 0.7 percent to 4,894.89 and the S&P 500 climbed 14.48 points or 0.7 percent to 2,090.54.

In overseas trading, most stock markets across the Asia-Pacific region saw modest strength on Thursday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both inched up by 0.1 percent, while China's Shanghai Composite Index edged up by 0.3 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index has slipped by 0.2 percent, the French CAC 40 Index is up by 0.4 percent and the German DAX Index is up by 0.6 percent.

In commodities trading, crude oil futures are climbing $0.54 to $50.10 a barrel after advancing $0.94 to $49.56 a barrel on Thursday. Gold futures are currently trading at $1,228 an ounce, up $4.20 from the previous session's close of $1,223.80 an ounce. On Thursday, gold fell $5.40. On the currency front, the U.S. dollar is trading at 110.40 yen compared to the 110.19 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1176 compared to yesterday's $1.1155.